ENERGY CONSUMPTION AND THE ECONOMIC FUTURE
SHAMSUL GHANI (email@example.com)
Jan 11 - 17, 2010
Energy consumption has hardly gone any revolutionary changes during the period from 2002-03 to 2007-08. The largest variation has been in the industrial sector which has recorded an increase of 7 percent going up from 36 percent in 2002-03 to 43 percent in 2007-08.
The obvious reason for the increase in industrial usage of energy during 2003 to 2007 was an average growth of 13.8 percent of large scale manufacturing. The era is now routinely condemned by the so-called proponents of democracy. With the change in governance system, the LSM growth abruptly came down to 4.8 percent in FY-08 and then to an ignominious 3.93 percent in FY-09.
ENERGY CONSUMPTION DURING 2002 TO 2008
YEAR AGRI-CULTURE COMMERCIAL OTHER GOVT. DOMESTIC TRANSPORT INDUSTRIAL LSM GROWTH 2002-03 3% 3% 2% 23% 33% 36% 7.2% 2007-08 2% 4% 2% 20% 29% 43% 4.8% Change (1%) 1% - (3%) (4) 7% (2.4%)
Energy consumption is influenced by a number of factors from resource management to optimal energy mix policy design, from political stability to handling of cartel to international lenders' pressure, and from international oil prices to policy dictates of multinational operators. Corruption comes into play with the collusion of government managers and cartels.
YEAR GAS PETROLEUM PRODUCTS COAL ELECTRICITY (MMCFD) CHANGE % TONES (000) CHANGE % TONES (000) CHANGE % (GWH) CHANGE % 1998-99 635,891 - 16,647 - 3,461 - 43,296 - 1999-00 712,101 12.0 17,768 6.7 3,168 -8.5 45,586 5.3 2000-01 768,068 7.9 17,648 -0.7 4,045 27.7 48,584 6.6 2001-02 824,604 7.4 16,960 -3.9 4,409 9.0 50,622 4.2 2002-03 872,264 5.8 16,452 -3.0 4,890 10.9 52,656 4.0 2003-04 1,051,418 20.5 13,421 -18.4 6,065 24.0 57,491 9.2 2004-05 1,161,043 10.4 14,671 9.3 7,894 30.2 61,327 6.7 2005-06 1,223,385 5.4 14,627 -0.3 7.714 -2.3 67,603 10.2 2006-07 1,221,994 -0.1 16,847 15.2 7.894 2.3 72,712 7.6 2007-08 1,275,212 4.4 18,080 7.3 10,111 28.1 73,400 0.9 Avg. 10 Years . 8.2 . 1.4 . 13.5 . 6.1 JUL-MAR 2007-08 955,625 . 13,342 . 6,559 . 55,208 . 2008-09 931,700 -2.5 12,892 -3.4 4,822 -26.5 55,614 0.7 (Source: Hydrocarbon Development Institute of Pakistan)
While it is heartening to note that we are developing a habit to make use of coal as an alternative fossil fuel keeping in view the large coal reserves for near future use, the development of gas sector through accelerated efforts on exploration needs not to be lost sight of.
During recent years, our transport system has fast switched over to CNG putting great pressure on our meager recoverable gas resources. Discouraging use of this green source of energy through mindless price hikes is a foolish idea especially when oil prices have started to pick up again.
The recent across-the-board increase of 18 percent has come as a shock to the end users who happen to be the masses in all cases. Commercial, industrial and transport sectors are quick to pass on the price increase to the common man. The change from an autocratic to a democratic form of governance has wreaked havoc to the common man within a period of two years.
The said price hike is aimed at increasing the revenues of SNGPL and SSGC as the international lenders demand government to keep the revenues of the two giant gas distribution companies at a certain minimum level.
It is surprising that instead of questioning the managing capability of mega oligopolies a free hand is given to them by the government through unilateral price increase. Our failure to be able to acquire technology and develop expertise to make use of our natural resources has made us dependent on foreign experts who must be paid in foreign currency.
The rising oil prices and depreciating rupee have mounted domestic resource development cost. This increase in cost is conveniently passed on to the end consumers. The cartel of middlemen and multinationals, who devour a major portion of price increase, is also responsible for end consumers' woes.
The current CNG crisis in Punjab and NWFP is handled through restricted supply, which is not a long term solution.
Another green source of energy serving as a substitute to CNG is liquefied petroleum gas (LPG). A petroleum derivative, LPG is used worldwide as an alternate clean source of energy. Its overall consumption is presently just three per cent of the total world energy requirement, yet its potential as a future option is huge.
In case of Pakistan, the consumption is still low, less than one per cent. It is mainly used by the transport sector as an alternate to CNG to avoid high prices of CNG kit. The domestic sector not covered by the national grid and pipeline network uses LPG as heating and cooking fuel.
LPG derived mixtures of hydrocarbon gases are fast replacing the use of hydrofluoric carbons (HFCs) as refrigerants to reduce damage to the ozone layer. But the flammability of LPG hydrocarbons restricts its use in some highly sophisticated systems.
Likewise other energy items, LPG has also been made subject of frequent price hikes. The ongoing tussle among the local LPG producers, LPG importers and LPG marketers has also given impetus to price escalation drive. Be it the natural gas, CNG or LPG, the vested interests have taken to the arena to extract maximum financial gain with little concern for the economic crisis. This greed game is going to trigger in very near future.
The inapt economic managers have also resorted to the easiest course of increasing revenue through mindless energy price hikes. In this month, the price of domestic cylinders has been increased by Rs 25, while that of commercial cylinders has been hiked between Rs 100 and Rs 120 in different regions.